1. April 2009

Diamond company suspends output

Namibias government has agreed that Namdeb, its diamond mining joint venture with De Beers, should halt production for up to four months because the global economic downturn has slashed demand, officials said on March 25. The company has had no sales since January this year, spokesman Hilifa Mbako said.

The announcement followed a similar move earlier this month by Botswana - the worlds largest producer - which is also suffering from the rapid fall in demand.

Namdeb will suspend production at its land operations for three to four months. But health, safety and environmental support services and maintenance work in the seawalls and other mining infrastructure will continue, Mbako said. Namdeb produces an average 1.6 million carats per year.

Employees will be given paid leave, but trade unions contested whether workers would receive their salaries.

The company has been cutting down on production since December, when mining was scaled down to a single shift a day from the regular double shifts. It has also scaled back its marine production and instituted voluntary layoffs.

De Beers, which controls 40 percent of the global diamond trade, says there has recently been a 20 percent drop in sales of polished diamonds. Namdeb embarked on a voluntary retrenchment exercise in January to cut its staff by at least 600. (SouthScan)

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